Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter Fiscal 2016 Conference Call. [Operator Instructions] I would now like to turn the call over to Jay Koval.

Thanks, Victoria, and good morning, everyone. I want to thank you for joining us for Brown-Forman’s third quarter 2016 earnings call. Joining me today are Paul Varga, our President and Chief Executive Officer; Jane Morreau, Executive Vice President and Chief Financial Officer; and Brian Fitzgerald, Chief Accounting Officer. This morning’s conference call contains forward-looking statements based on our current expectations. Numerous risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements. Many of the factors that will determine future results are beyond the company’s ability to control or predict. You should not place undue reliance on any forward-looking statements and the company undertakes no obligation to update any of these statements, whether due to new information, future events or otherwise. This morning, we issued a press release containing our results for the third quarter of fiscal 2016. This release can be found on our website under the section titled Investor Relations. In the press release, we have listed a number of the risk factors that you should consider in conjunction with our forward-looking statements. Other significant risk factors are described in our Form 10-K, Form 8-K, and Form 10-Q reports filed with the Securities and Exchange Commission. During this call, we will be discussing certain non-GAAP financial measures. These measures, and the reasons management believes they provide useful information to investors regarding the company’s financial conditions and results of operations, are contained in the press release. And with that, I’ll turn the call over to Jane for her prepared remarks.

Thanks, Jay, and thanks for joining us for our third quarter earnings call. I’ll cover two topics today, which should leave plenty of time for questions after our prepared remarks. First, I will review our year-to-date results and then I will discuss our revised outlook for fiscal 2016. Let me start by reviewing our recent results. Against the backdrop of deteriorating economic conditions and foreign exchange moves that negatively impacted our reported results, we delivered solid underlying net sales growth of 4% in the third quarter. These results reflected two different economic realities. On the one hand, we delivered strong and consistent growth in the developed world, where underlying net sales were up 6% year-to-date. On the other hand, we experienced decelerating results in the emerging markets and continued weakness in our global travel retail channel. Third quarter results pulled our year-to-date underlying net sales growth to 5%. Top line results in the United States maintained their healthy momentum, growing 7% in the third quarter and in line with the 7% we delivered in the first half of the fiscal year. This great performance was led by the leading portfolio of authentic American whiskeys, including the Jack Daniel’s family of brands, up 7%, and Old Forester and Woodford Reserve both gaining share in the rapidly growing urban category. Our tequila brands delivered strong growth in the United States, with Herradura and el Jimador up in the teens. Developed markets outside the United States grew underlying net sales 5% during the first nine months of our fiscal year. Improving results in Australia were more than offset by Germany’s third quarter declines, where our business was negatively impacted by seasonal trading patterns that we expect to reverse in the fourth quarter. Excluding this timing issue in Germany, our non-US developed markets were…

Thank you, Jane, and good morning, everybody. As a summary, I thought Q3 was a pretty solid underlying quarter for us, given that during the November through January time period, we witnessed the terrorist attacks in Paris, the continued difficulty for emerging market economies and currencies, and a very rough start for the calendar year 2016 equity markets in January. By contributing to the halo of uncertainties, these forces play a role in moderating the consumer and trades’ willingness to purchase in the short term. As a result, and despite Brown-Forman’s favorable geographic diversification, we were not immune to these factors as they weighed somewhat on the quarter’s underlying sales growth rate, which was still a very nice 4%. Our year-to-date underlining growth in sales and operating income now stand at 5% and 7%, respectively, and our 12-month return on invested capital remains very strong at 22%. This growth in return metrics remain ahead of our industry competitive set. As in past quarters and consistent with our other US-based companies, these very nice organic year-to-date results are being offset by a strengthening dollar and this continued to weigh on reported results. In our case, it had the effect of reducing our year-to-date underlining operating income growth from 7% to 2%. With these factors present as current headwinds, you might be wondering if we’re altering our course in any way. Let me touch on that briefly. Looking back on other challenging macroeconomic environments we’ve encountered, I feel that we’ve been very well served by prioritizing three things: First, keeping our long-term perspective; second, intensifying and narrowing our focus on the very best growth opportunities we foresee for the company; and third, bringing new ideas that can capitalize on those opportunities. There are few examples. Despite recent emerging market challenges, it is…

[Operator Instructions] Your first question comes from the line of Vivien Azer with Cowen and Company.

So in light of a very tough macro backdrop, I think the underlying numbers actually look pretty good. But as I think about the outlook, Jane, I know it’s very hard to get a read on inventory levels in emerging markets. But as we think about the new outlook for sales growth, can you talk about how you guys are thinking about inventory levels? Do you think that there’s more destocking to come? Do you think inventory levels are right in emerging markets? I know it’s hard to gauge, because FX is going to drive that going forward, but any color you could offer there would be helpful.

That’s a great question. We actually had this conversation yesterday as it related to our inventory levels in the emerging markets and we do still like and we alluded this that foreign exchange has definitely impacted our trade partners’ buying patterns. And likewise, probably has reduced some of their inventory levels. In that part of the world, we don’t have a lot of visibility into the trade environment. We do believe that it’s one of the drivers of the slowdown that you saw, at least felt in the emerging markets. Obviously, it’s been driven though by the economic malaise that’s going on there in the foreign exchange devaluation. So we expect more to come. I don’t know that I can predict that right now, either. I think there are some markets that have held pretty well for us: Brazil, Turkey, places like that are continuing to do very well, Mexico. And we quoted some take-away numbers in Poland and Mexico on Jack, and they are very strong at this point.

The only point I’d add, it’s just so hard for us to get a single metric that can help us first of all and then help you all understand what might be underlying the results. We do think it’s a blend of both consumer and trade impact, particularly on the short-term and the reason it’s important, of course, is the trade impact can be one-time and can rebuild depending upon what the circumstances are in those countries. I do think I’m always reminded of the impact that’s unique to either our industry, but in this case our company where you have single point production, because it’s the inventory adjustments that occur happen over a little bit longer period of time, because you have time on the water, you have time going from – because we don’t sell as our company in a lot of these countries direct to retail, you go to importers who go to agents who sometimes go to sub-wholesalers and so the trail of inventory can be longer for a single point producer who has a multiple-tier distribution system. And so that complicates it even more. I suspect some of this, if I think about weakening emerging market economies, I mean, on some level, if you look at the real GDP growth going back, they were growing at more like 8% go back four or five years ago and now down to 4%. So I suspect some of it has been making its way into our results overtime. And then when you have these devaluations of the currency that really impacted, you see it a little bit more dramatically. So those are qualitative comments to a quantitative question, I know you asked, sorry, but we don’t have great visibility into it.

No. And I appreciate the challenge there, but maybe if I could ask it a different way. As you think about setting external expectations for the investment community, does the 5% new outlook assume further destocking, just out of an abundance of caution, given the difficulty in the read?

It does not.

I don’t think it does. I mean, I think it would reflect – it would be maybe a continuation of the trends and to the extent that they had some destocking in some consumer, it might be in the same proportion maybe is a way to think about it.

And just my second question, as I think about the composition of the sales growth, very heavy to price mix, less so on volumes. And as I think back to some of our discussions earlier in the fiscal year, it strikes me that perhaps the balance of price mix to volumes has not played out exactly as anticipated. I recognize some of that has got to be pricing to offset FX. So can you talk a little bit about your pricing strategies in emerging markets? And specifically, I think in Russia, where I think one of your competitors has taken pricing in the last few months.

We’ve actually taken pricing in Russia ourselves quite a bit. And so we’re looking at each market in the emerging markets on a case by case basis in terms of how we – whether we should take pricing or not and we have taken it not just in Russia, couple of other markets, we’ve taken it in Brazil, some other places as well. So again, our product Jack Daniels was already pretty highly priced for the consumer down there to start off with. And so with the devaluations of these currencies significantly, of course, it makes – as we were talking about in the earlier question, the affordability of our products a little bit out of – less so than there has been. But as we look forward, again, we’ll continue to look at these countries on a market by market basis. We’ll figure out what’s best, really market by market is what we’ve been doing.

Just for historical reference, the one thing that would influence our posture about some of these emerging markets, of course, the affordability factor when you have the difficulties they have. But I’m influenced a bit on my posture toward it based on – and it’d be hard for everybody to remember this, but back in the FY 2012, 2013 and even a little bit into 2014, in a lot of these emerging markets, we took pretty significant price increases, mostly for price positioning and premiumization where there’s not as many big global brands in a lot of these countries, like Africa, even in a country like Mexico, we felt at that time there was an opportunity to go up. But we found that it was better for us to do that with large increases versus a bunch of small ones at that time. So in some of these places, we went up 10% or 12%. And so – and those will soften your volumes a little bit, they will have that impact. But in any event, in those cases, we’ve been a little more cautious about raising prices today, particularly given the environment we’re in.

Your next question comes from the line of Bill Marshall with Barclays.

So on the last – the second quarter conference call, you guys sounded relatively optimistic, you cited some positive November trends. And also it sounded like you were a little bit more optimistic on travel retail at that point in time. So I’m just curious, first of all, on that November data point, it sounds like it must have kind of decelerated as you moved through the quarter. So I was wondering if you could give us a cadence of how that has materialized and into the fourth quarter. And then on travel retail, was that more on the US side that you felt more confident, and maybe it just didn’t come through the way you had expected? And if you could just unpack kind of what was going on in that channel in particular.

On the global travel retail channel, I’ll start on that one first. I think we did allude to we had insights into what our November results were looking like and it was a very good November for global travel retail and for the company at large. What we found though was the results did continue to soften in that channel over the remaining two months of the quarter. Again, they are not disconnected to the emerging market economies, there’s some interplay going on there too. We know that global travel retail travelers, if you will, come from [indiscernible] come from Russia. We know what’s going on in Europe overall and so that definitely continued. Paul alluded to in his talks the terrorist attacks, so all that activity going on, the confidence going down, I think it just continued to hit the global travel retail business. And our overall results for the quarter, again, we still think they were very solid against the backdrop of what’s going on in the world. And results in December and January were off a bit, again due to the emerging markets and the global travel retail that we’ve been referring to throughout.

I think the other thing that I’d add is one of our top countries and Jane referenced it in her opening comments, Germany, just had a really rough Q3 that we think is seasonal, I mean, in terms of the trading patterns and they will come back in Q4. And I do think, look, when we were commenting all we had at that point were early indications for November. I’ll remind everybody that November, December, January period for us is a big one because it includes all our holiday and the gifting which is seasonally disproportionate for our industry. So I think more than anything it was the headlines we provided you that this large group of emerging markets for the quarter saw more of an impact than we would have anticipated either through early reads on November or through the full quarter.

And going December, January, any early read on how we should be thinking about February?

I wish we could provide that, yes. I think it’s reflected in our guidance.

And then just one quick housekeeping item. I just want to make sure I’m understanding the puts and takes on foreign currency. I know you called out the $0.06 additional impact. That’s all from spot rate movements. Jane, you mentioned the purchasing power impact. Imagine that’s on the underlying side of the guidance, and the $0.06 is just purely on the way spot rates have moved? Is that a fair assessment?

Yes, that’s correct. You’re exactly right.

Your next question comes from the line of John Faucher with JP Morgan.

Just two questions here. First, just to follow-up on the last question, which is, it sounds like what we should look at is, since November, I hate to use this term, but more of a step function down to a lower level, and it seems to have stabilized there as opposed to a continued deceleration and a worsening of the trend. Is that kind of the right way to look at it, where you just had that sort of step function down?

So included in our full year outlook is what we’re expecting for the – it’s embedded in our outlook for the rest of the year. So we’re expecting 5% top line net sales growth. That is what we worked.

And that would apply to the remainder of our fiscal year and just would not reflect, because we have not yet looked at 2017 and we’ll provide that when we come out with updated guidance in early June. But certainly your comment would apply for the balance of this fiscal year.

It doesn’t build it on with offsets just so to have some thoughts as you go forward. We did talk about the SoCo and Tuaca sales and the impact it had on us in the quarter. We said our results would have been – our year-to-date results would have gone up almost to 6%, so 0.5 point or better. So not having that drag on our top line going forward. What will happen in global travel retail in the emerging markets, we’ve pointed out a point-and-a-half drag on our results. Hopefully, those start to stabilize and then you won’t continue to have that as we go forward. And then we did build, therefore get a benefit from the JD Fire of about a little bit over a point. So just some things to think about in this process and we’ll be giving you guidance out for FY 2017, we’re in the midst of our planning process now and we’ll talk to you in June.

I’d add to it, just because if you take the 5% sales growth rate through the fiscal year and finish the year at 5%, having to go up against this launch of Fire last year, you could read that as a little bit of optimism because we have to overcome it. So as I think there is something in that that you could read a little bit that I know expectations are always half for Brown-Forman, I always feel that way. And so in any event, I don’t – Jane and my comments reflected I don’t feel like the results we’re talking about here today diminish our optimism in any way about the business. It’s some of these temporary circumstances that we feel are out there related very much to the economies where we’re doing business.

And that actually was my second question, which is sort of thinking about the Fire comps. Earlier in the commentary, you highlighted how Honey, I think you had said this was sort of the peak comp quarter for Honey. You’ve got Fire now that you have to comp. But again, you do get the benefit from the other brands. So it sounds like you feel like, net-net, the puts and takes from a comp standpoint as well as the divestitures should even out pretty nicely as we look through the balance of the year?

I think our top line growth for the year is 5%, again. So that’s where we are year-to-date.

And I’d really go back and look at the – focus on the adjustments Jane was talking about on that, that accounted for that, $0.08 reduction today. I think that those give you the best insight to the moving pieces that remain, I think.

I think what you’re asking about a little bit more, let me – is that you were talking about the fourth quarter only. So, our outlook does reflect the challenging comparison to last year’s fourth quarter. So in other words, the absence of the national launch of Fire. We did note, though, that we are expanding in a couple of markets overseas where we’ve been testing the brand. So, in the UK market and in...

Australia.

Australia. We also, as Paul just talked about and I talked about in my notes too, that the drag on our top line, one of the drags in our top line in the third quarter was Germany related and we expect those trends to reverse themselves in the fourth quarter. So there was a timing trade pattern buying pattern. So we expect that to come back. And then we have a lot of puts and takes up and down throughout the rest of the P& L. We expect costs to be more favorable, as they’ve started to become, in the third quarter, as we’ve lapped the wood costs that were so high last year. They are still high, but we don’t have the increasing height of growth.

SG&A benefits.

Fewer operating expenses, and then of course the tax rate is expected to be lower. So all those things combined give us confidence in our underlying operating income forecast and our EPS forecast for the year that we know today.

I think my question was really more sort of about the top line and not as much Q4, but sort of looking out next 12 months, right, as you deal with the Fire comps and the divested brands. But do you feel like, from a net standpoint, you are in a good situation in terms of how those things are going to balance out is what you’re sounding like?

Yes, absolutely. For Q4, and again, we will update any other new news as it relates to things that would have a positive or drag on the top line when we come out with full-year FY 2017 forecast.

Your next question comes from the line of Judy Hong with Goldman Sachs.

So one is just – first, is just a modeling question, Jane. Just as we think about 2017 in terms of the SoCo impact as well as the buybacks, so I think you had said $0.17 that were lapping in terms of the divestiture? And then is the intention with the $1 billion new buyback to fully offset that dilution pr is it the $1 billion really more phased throughout the year in 2017?

So, Judy, just – both questions, I’ll do the SoCo, first of all. The impact on this year, we noted in our earnings release this morning, you’re right. Through January, the results were $0.17. We will obviously have the month of February still to be added in there. So that’s why we gave you the 2015 full-year impact, which was $0.24, so that you would have two benchmarks, if you will, to understand the absence of the SoCo and Tuaca numbers. So that’s – just to get that clarity out, first and foremost. The second thing you were asking about was our share repurchase that we announced the $1 billion – new $1 billion one as of January. I just want to take a moment and step back and talk about how we think about share repurchases in the first place. We consider these really opportunistic investments. If you look over the past history, sometimes we announce these things; we don’t always complete them, so we remain flexible with these. We generally do them through open market purchases that allows us the flexibility to start and stop different things. And the reason why I’m explaining that to you is because if other things come up, of course investment heavily behind our organic growth of our business today, via distillery expansion, homeplace investments, as we talked about, and, of course, our dividends have been increasing for a number of 70 – for 32 years, and we’ve given them for 70 years. So we’ve done all that side, but we also then want to make sure if there’s acquisitions that come about that meet our strategic criteria. We have that flexibility to start and stop things as we go. And then, of course, if we decide to do returning cash to shareholders, we can do that too. So we’ve got that out there. Just wanted you to know we aren’t forecasting – it will not – if you do a calculation, even if we were to complete it all, it does not offset the dilution from Southern Comfort.

That specific effort doesn’t. And so let me elaborate too, because I agree with Jane. Here’s a way that you – at least if you want insight into how I think about it – let me give you an example of how the sale of Southern Comfort that we announced yesterday – I can think of at least three pretty direct ways that it will benefit Jack Daniel’s. The first is, going forward, is the absence of drag on the Corporation’s growth rate that, disproportionately, Jack Daniel’s, over these past few years, would have to cover. So that absence of drag is a benefit to Brown-Forman Corporation and also very much it takes some pressure off of Jack Daniel’s to grow that base of operating income. The second is, with the absence of Southern Comfort and Tuaca, our ability to take the time that we were devoting to those brand-building activities and rededicate them to our highest priorities. I made the example in my opening comments, but let’s just say in this example, Jack Daniel’s Tennessee Whiskey will benefit by us being able to redirect some of our time and attention and creative energies to that particular brand. That becomes, in fact, a multimillion dollar investment behind the Jack Daniel’s business. And then the third is a little more subtle, is that the proceeds from Southern Comfort, which we had a nice gain on the sale, to the extent that you attribute that we would be going and using some of those proceeds to do some of the share repurchasing that is available to us. In effect, the way I like to think about that is, for a non-selling shareholder, a shareholder does not sell into a share repurchase and remain, what ends up happening, in effect, for them is that they, through Brown-Forman’s activities, have sold Southern Comfort and made a reinvestment in Jack Daniel’s for them. So I actually feel like this ends up being a multi-dimensional benefit for our long-term shareholders; people who are very interested in Brown-Forman’s progress over generations or a five and 10-year period. And in doing so, we’ve done this several times before with portfolio reshaping, and not always has it had this other dimension of repurchasing shares, and the remaining shareholders owning a little bit more of Brown-Forman as a result of it. But in this case, I actually think it’s a wonderful use of proceeds or reallocation of our time that benefits that particular brand and the shareholders. So it’s a way that you might connect a couple of the dots that are in our news today.

Paul, just maybe on the US market, just thinking about Jack over the last six months or so, obviously the comparisons have been pretty tough. The NABCA data has been a bit choppy. Obviously, the flavor whiskey competition continues to intensify. So can you just give us some sense of, obviously, perhaps there is a reinvestment component that you’re looking at to drive more of an acceleration, but just broadly speaking, your view of where Jack is today? And the incremental contribution that you’re getting from Fire and how much of that you think will be still an incremental to the broader franchise?

I mean, you gave a very nice summary of some of the prevailing influences. Here is just a way that you might think about it. I think in the end, if I were to summarize, just to say that, because your question is specifically about the United States, a lot of this comes down to what do you foresee as possible for the brand development? And what are the best ways to achieve it? And I’d start with that thinking about the full trademarked Jack Daniels because, of course, these line extensions do play a role in it. And I want to say something about that as well. But here’s something you might think about as it relates to Brown-Forman and this American whiskey momentum that exists. And I actually feel like this because we have difficulty even inside of our own company or through our trade system to get our mentality just right on our expectations. And so let me just use this example. Jack Daniel’s is roughly 5 million cases in the United States. When it advances in a year, a typical year, say, 3% on volume, it generates 150,000 cases of incremental growth in the United States. I’ll use the example of a 500,000 case brand, which is a pretty sizable brand in the US market, and we’ve got a couple of them. They’re just short of that, actually, I mean, Woodford Reserve and Gentleman Jack. And in Woodford Reserve’s example, it’s grown about 30%. So it’s growing 150,000 cases in the US market. And then you use the example, I mean, the one that’s been the most resurgent here and just to show you the scale of us getting what we consider to be our proportionate growth in this market, even Old Forester, which would get…

Your next question comes from the line of Mark Swartzberg with Stifel Nicolaus.

I guess a couple of questions. One is – and it was helpful hearing your responses to John. Can you give us some sense today about how you’re thinking about the budgeting for fiscal 2017? And by that I mean you’ve had a pretty steady trend of high-single, even low-double digit operating income growth on an underlying basis and you’re seeing some issues from a growth perspective. Is it in any way reasonable in your mind to think of fiscal 2017 as an investment year, a transition year, a year where you do need to slow down that rate of organic operating income growth for the sake of organic revenue growth longer-term or is that not necessary in your mind?

If I felt that changing the mix of investment for some reason would have a beneficial short, mid or even long-term benefit, you would expect us to do it, of course. I mean, we will sit and really nail down the specifics of this in the next few weeks here. But I will tell you how I’m thinking about it, because this is one of the wonderful things for all of you who get to, when you ask these questions, honestly, we have to make decisions about what to make, which literally drives some of our views. And, of course, we worry about one-year trends. But in these cases, you got to worry about four, five, six, seven, eight-year trends as well. And I’ll just tell you, even with what we are observing out there in terms of difficulties and things like that and we’ll tighten up what we think for 2017, I have not altered in one way my view of, if I look backwards at Brown-Forman sort of three, five, seven, and 10-year results and then look ahead, I haven’t seen anything that makes me want to change those viewpoints.

And then on the US, could you give us a little more color on what you’re actually seeing in the way of – and take-away for Honey specifically, which I think is down, and Fire, which, of course, has gotten this big distribution gain, but kind of – and takeaway dynamics. And this is very imperfect, we know. But when we look at the IRI data, and back out Honey and Fire, and look at the total Brown-Forman portfolio, volumetric year-on-year trends in those tracked markets, we see a slowdown in those – in that large portfolio, ex these two extensions, which seems a bit disconcerting if I’m in your shoes. But it could have a silver lining in the sense that you’ve been so focused on these innovations that there’s opportunity there to simply refocus on these other brands. So I realize it’s a fairly involved question, but can you speak to that?

I mean, your insights on that, I think, are correct. When you start to move pieces in and out, you get different insights. But I mean I also could do the same thing a little bit on – if we just focused on Woodford Reserve and Old Forester, our growth rates would be exceptional. And I think that this whole concept of portfolio management is one that any company that decides to sell more than one brand has to wrestle with. I think a way I would answer yours is the things that would be dragging down our top line in IRI – you couldn’t be more correct there – brands that are lower priority to us, say, than the new things. But what it isn’t reflecting what’s happening at the bottom line. And I actually think that it’s important for people to know that even if you get a drag on a Southern Comfort or a Canadian Mist, for example, using the US as an example, its impact at the bottom line will be far less significant than the focus – the increased focus you might provide to a very high gross profit per case item like a Tennessee Fire or a Woodford Reserve. Related to your – but nonetheless, you want to reduce drag wherever you can; is either through the improved performance on the example of Southern Comfort and Tuaca, through literally the disposition of the business. I mean, so in those cases, you reduce drag. The stuff we keep, I mean, we absolutely have to put our best foot forward and so you can expect us to try to do that. I don’t think it would be in the best interest of Brown-Forman’s long-term value creation to take our eye off of Jack Daniel’s Tennessee Whiskey…

And if I could just follow-up on the specific case of Honey, which is even an obvious success, but with success comes the higher bar. Can you just give us some sense of – I believe it continues to be down year-on-year for now two quarters in a row in the US specifically. Can you just talk about how you’re thinking about the velocity for that brand and the opportunity for it here in the United States?

Yes. I think in year, what are we, four, I guess it is? Five – year five. Yes, so we are in year five. You are accurate on the – I think the three and six month trends, it’s gone slightly low-single digit negative. And I would attribute – I mean, if I were diagnosing it, I don’t have the component pieces here, I’d say the contributing factors would be the big halo of competition, and some of that from within the Honey flavor segment within flavored whiskey, there’s been an increase of Honey competition. But then also, just within flavored whiskey, as particularly this apple category took off here in the last year. So those would be some contributing players. I also think it would be silly for us not to say there hadn’t been a little bit of cannibalization that could contribute to Tennessee Honey from Fire’s launch, and that could be a little bit consumer, it could also just be focusing attention or sharing displays and some of these other things that go on when you are selling things from the same family. But it still presents the same question, how do we, in year six and beyond, in the United States, continue to build the brand in a way that competes better versus what the competitive references are out there? So it’s the – for our Brown-Forman employees who are listening, that’s the question we’re focused on. Yes, it really is. I mean, it’s very true. And the same things are going to be true with the ensuing – we are already looking at sort of Jack Daniel’s Tennessee Fire. Remember, it had some test markets that go back more than one year, so you could start to learn a little bit more from those markets as well. And with the passage of time, all, I think, new brand entries have this challenge. And I think, in my view, the answer isn’t to go put five more flavors out in the market. It’s to really focus on building these brands.

You can bring your wife in, Paul, and maybe, Jane, you can be part of the consulting team to help kind of restore growth in your sixth year.

We’ll do that.

I’ve learned a lot over the years from listening to my wife about the consumer trends in my business.

All wise men do.

We all wise men do, you’re right. Thank you for the comment.

And your final question comes from the line of Bill Chappell with SunTrust.

This is actually Stephanie on for Bill. Just a quick question. I’m just kind of looking at your updated FX guidance. Can you give us just a little more color on which countries were the meaningful drivers of some of your lowered outlook?

For FX?

Which countries contribute to the FX lowered outlook?

That’s right. Which were the main ones that changed materially from your last guidance?

The biggest one was the pound. You’ve seen the dramatic change in the pound over the last month. We are using the spot rates as of last Friday. So that’s the biggest.

And that’s our largest non-US market also, yes.

Yes. Euro is the largest currency and pound is the next largest, yes.

So that’s a big influence. But also – because we’re so geographically spread, you do get little components from just about everywhere.

Okay. Thank you, Paul and Jane, and thanks to all of you for joining us today for Brown-Forman’s third quarter earnings call. And please feel free to reach out to us if you have any additional questions. Have a great week.

Again, thank you for your participation. This concludes today’s call. You may now disconnect.